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Theoretical Framework of the Study
47
CChhaapptteerr 22
TTHHEEOORREETTIICCAALL FFRRAAMMEEWWOORRKK OOFF TTHHEE SSTTUUDDYY 2.1 Introduction 2.2 Micro finance and Self-Help Groups in India 2.3 Income-generation activities of SHGs 2.4 Swarnjayanti Gram Swarojgar Yojana 2.5 Marketing Initiatives under SGSY 2.6 Training under SGSY 2.7 Support of NABARD 2.8 Models of bank linkage in India 2.9 Role of NGOs 2.10 Self-Help Groups in Kerala 2.11 The Kudumbashree Programme in Kerala 2.12 Economic Development Programmmes of Kudumbashree 2.13 Marketing Initiatives of Kudumbashree 2.14 The Concept of Women's Empowerment
2.1 Introduction
The emergence and rapid multiplication of Self-Help Groups based on
micro-credit is a phenomenon that is gaining increasing importance in the
development scenario. SHGs are being viewed by Government and NGOs as a
strategy for both women’s empowerment and poverty reduction. The experience
of SHGs has shown that they have provided improved access to credit. Poor
women are now perceived by the mainstream financial sector as creditworthy.
Women have used savings and credit for needs such as those related to education
and health, and, in particular, crisis-related needs. Participation in SHGs has
meant opportunities related to mobility and a legitimate space in the public realm
for leaders of SHGs (S.M Feroze and A.K Chouhan).
Co
nt
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ts
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The Self-Help Group is a homogenous group formed by 10-20 members
of poor households having similar objectives, aims and aspirations. The SHGs
are formed on the principles of self-help to promote individuals through
collective action in areas of augmenting income, gaining easier access to credit
and other resources, and increasing their bargaining power. Each homogeneous
group meets monthly or weekly close to the members’ homes. All members
save a commonly agreed amount at that meeting. In order to leverage a group
loan, they deposit this collected amount in a bank. In cases of emergency,
members can take a loan from the group fund. The basic philosophy lies in the
fact that shortcomings and weaknesses at the individual level are overcome by
the collective responsibility and security afforded by the formation of a group
of such individuals (Zubair Meenai - 2010).
The collective coming together of individual members is also used for
education and awareness building, collective bargaining power and peer pressure
among others. As the groups mature, they initiate income enhancement and
entrepreneurial activities like, Agriculture nurseries, Diary development, Petty
shop management, Wooden products, Soap and detergent units, Vegetable
cultivation and marketing, Umbrella making, etc.. These can be both individual
and at group level. Groups also start connecting with other groups in the area and
start the process of cluster formation, networking and federating, thus acquiring a
large status and becoming a large pressure group operating in an enhanced sphere.
Among all the managerial functions, marketing function is one of the
important and challenging functions of the business. Marketing poses a major
problem both of raw materials and of finished goods. To cope with the
competition in the market, advertising and publicity of the products become
indispensable and that again involve heavy funding. The small entrepreneurs
do not know anything about the trends in markets, do not have R&D facilities,
Theoretical Framework of the Study
49
knowhow for improving designs and quality; nor do they know the technicalities
of pricing, etc. It has been observed that most of women entrepreneurs could not
continue with their business or trade activity for want of guidance on consumer
demand and market mechanism. Women entrepreneurs depend mainly on the
customers as a means to advertise their products. As a majority of the Self-
Help Groups are women Self-Help Groups, they are also facing these problems.
Some kind of organized marketing initiatives are needed to be evolved (Anil
Kumar - 2004).
2.2 Micro finance and Self-Help Groups in India
Micro-Finance is a term used to refer to an activity on provision of financial
services to clients who are excluded from the traditional financial system on
account of their lower economic status. These financial services will most
commonly take the form of loans and micro-savings, though some micro-finance
institutes will offer other services such as micro-insurance and payment services.
Generally, micro-finance groups in India are called Self-Help Groups (SHGs)
promoted both by the Government and the non-governmental organizations.
The concept of self-help groups can be traced back to the Gandhian
Grama Swaraj movement; the success of the Bangladesh Grameen Bank,
started by Prof. Mohammed Yunus in 1976, triggered momentum to the
concept. The SHG provides the poor with alternative means of obtaining
economic and social entitlement to resources through their active participation.
SHGs are formed on voluntary basis, and are perceived appropriately as
people's institution, providing the poor with the space and support necessary to
take effective steps towards greater control over their lives in private and in
society. Initially, SHGs were organized for savings mobilization and thrift
operation among the poor and later, they started taking up income-generating
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activities like farming, agro-processing and other micro-enterprises (Lina Joy,
A. Prema and S. Krishnan - 2008). Each group acts like a bank, and decides
the internal operations of the group in the distribution of loans, monitors the
utilisation of loan amount and enforces repayment. Generally, the group
disburses the loan amount among the members according to the criteria arrived
at by the members. The members borrow both for consumption and for
productive purposes. As the group attains maturity in due course of time and
the common pool of resources of the group, i.e., savings become insufficient
for meeting the varied credit demands of the members, the group applies for
external assistance mostly from banks under the NABARD bank linkage
programme although other avenues are also emerging of late.
There are differences between Grameen Bank model of Bangladesh and
SHGs established and spread throughout India. Grameen groups are relatively
smaller in size as they consist of five members, whereas membership of SHGs
is 10 to 20. Unlike the Grameen Bank of Bangladesh, SHG has its own credit
fund for relending and the initial lendings are made through internal savings
contributed by the members. Moreover, the SHG is considered as the ultimate
lender and can be perceived as a micro-finance institution, whereas Grameen
Bank groups do not normally have resources at their disposal. Members' thrift
is deposited in the financial institution which has a federating structure, and
such funds are lent to the members of Grameen Banks. As a result, after some
time, the SHG may have enough capital to meet the financial requirements of
its members and may not require any borrowing from financial institutions.
Therefore, SHGs can be considered as independent institutions, if they
mobilise sufficient funds for disbursal among members. On the other hand,
Grameen Bank group members have to depend on an outside financial
institution for credit, as long as they maintain thrift in the federation.
Theoretical Framework of the Study
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In addition to the usual functions of micro-finance groups such as
savings, credit and insurance, SHGs engage in issues of social significance.
These are small groups of 10-20 members. In India, almost 90 per cent of the
groups comprise only women. The concept of SHG is wider, and is not the
same as the micro-finance group. In the context of micro-finance, an SHG
consists of 10-15 members. SHG members can be both men and women.
However, 90 per cent of the SHGs in India have only women as their members
(NABARD 2004), who periodically contribute a fixed amount of savings and
borrow from the fund thus created.
In most of the cases, the formation of SHGs has been facilitated by the
NGOs, although the Government has also been an active player. NGOs have a
role in bringing about the collaborative linkage between banks and groups.
They act as both facilitators and micro-finance institutions. As facilitating
institutions, NGOs organise the poor into groups, undertake training for them,
help in arranging inputs, extension and marketing, introduce saving and
internal lending, help in the maintenance of accounts, and link them with the
banks for credit requirements. Here, banks directly provide credit to the SHGs
with the NGOs' recommendations. In the second case, where the NGOs work
as MFI (Micro-Finance Institution), they have to undertake some additional
functions besides the function as a facilitator. Here, the loan is given to the
NGOs, for on-lending to the SHGs/ individual poor. The NGOs will be legally
responsible for repayment to the banks and will be bearing the risk in cases
of non-payment. The experiences of both NGOs and banks show that micro-
finance groups have two distinct phases, pre-formation and post-formation.
Pre-formation phase includes, identification of the village and target group,
providing awareness to the members identified on the importance of groups
and motivating them to come together. In the post-formation phase, conflicts
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between individual interests and the group interests are resolved. The set of
procedures to be followed by the group, rules to be adhered to by the members,
and the roles to be played by the leaders are arrived at by intense discussion
among the members in the groups.
Even though the NGOs have played a prominent role in the promotion of
SHGs, often the poorest were finding it difficult to gain membership in the
programme. It is observed that the NGOs, which obtained better understanding
of the situation of the area in which they were working, did well in the
formation of micro finance groups.
The cumulative savings of SHGs in India with various banks reveal that, as
on March 2011, the total amount saved was ` 7016.30 crore (NABARD 2012).
This unprecedented growth of savings and lending operations among the poor
changed the hitherto notion that the poorest cannot save and are not creditworthy.
Table 2.1 Progress of SHG programme in India
Year Bank loans to SHGs
Cumulative ` (Crore)
Cumulative number of SHGs
Bank Loan per SHG (`)
2001 480.87 263825 19315 2002 1026.34 461478 27597 2003 2048.67 717360 39953 2004 3904.20 1079091 51296 2005 6898.46 1618456 55515 2006 11375.50 2238565 72552 2007 12366.49 2894505 59417 2008 16999.90 3625941 72076 2009 22679.84 4224338 76128 2010 37133.14 5811160 91083 2011 31221.60 4787000 65222 2012 36340.00 4354000 83464
(Source: NABARD Annual Report- Various years)
Theoretical Framework of the Study
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From the above Table, it is clear that there is a tremendous increase in
the number of SHGs linked with banks. The cumulative bank loan provided to
banks in 2001 was ` 480.87 crore, which multiplied to an amount of ` 36340
crore in 2012. The cumulative number of SHGs that availed the respective
loan increased from 263825 in 2001 to 4354000 in 2012. The loan availed
per SHG increased from ` 19315 in 2001 to ` 83464 in 2012. To assess the
growth rate in the number of SHGs in India, actual data taken from the
NABARD (National Bank for Agriculture and Rural Development), during
the ten years from 2000 to 2010 is used and the results are presented in the
following Figure.
(Source: NABARD Annual Report- Various years)
Figure 2.1 Progress of SHG Programme in India from 2001 to 2012
The number of SHGs in India increased from 263825 to 4354000 over a
period of twelve years from 2001 to 2012. The data over this period seem to
show an exponential growth in the number of SHGs in Kerala. Using the
function, y= aebx, the equation estimated using regression tool, results in
b=0.331, a=25255 which is valid with a significant R2 value, 0.972. To further
Chapter 2
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add an explanation, the initial number in SHGs is expected to be at the rate of ‘b’.
Now the progress of SHGs in terms of bank loan availed is given below.
(Source: NABARD Annual Report- Various years)
Figure 2.2 Bank loan per SHG
The bank loan given to each SHG during the ten years from 2001 to
2010 shows an increasing trend. The rate of growth can be well established
with a linear trend with b=7197 and a=16905 with a significant R2 value of
0.927. It implies that the bank loan given per SHG is expected to grow at a
linear rate of ` 7197 over the period from 2001 to 2010.
Table 2.2 Bank loan outstanding against SHGs in India (Cumulative)
Year No of SHGs Loan outstanding (Cr)
Up to 2007 2894505 12366.49
31.03.2008 3625941 16999.91
31.03.2009 4224338 22679.84
31.03.2010 4851356 28038.28
31.03.2011 4786763 31221.16 (Source: NABARD Annual Report- Various years)
Theoretical Framework of the Study
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(Source: NABARD Annual Report- Various years)
Figure 2.3 Bank loan outstanding
The bank loan outstanding shows an increasing trend. The rate of
growth can be well established with a linear trend with b=4874 and a=7636
with a significant R2 value, 0.992. It implies that the bank loan given per SHG
is expected to grow at a linear rate of `4874 crore over the period.
The above Table shows the cumulative bank loan outstanding in India
over the period reveals that the total number of SHGs linked with various
banks increased to 47.87 lakh as on 31st March 2011. It also shows that the
cumulative loan amount outstanding to the SHGs by the various financial
institutions was ` 12366.49 crore in the year 2007, which had a manifold
increase to ` 31221.16 crore as on 31.03.2011. It indicates that the growth of
linkage was tremendous.
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Table 2.3 Savings of SHGs with banks- Region-Wise (As on 31.03.2011)
Region Number of SHGs Savings (In Crore)
Northern Region 372772 (4.99) 328.57 (4.699)
North Eastern Region 324739 (4.35) 131.04 (1.87)
Eastern Region 1527618 (20.47) 1408.38 (20.07)
Central Region 786436 (10.54) 603.38 (8.60)
Western Region 960921 (12.88) 829.01 (11.82)
Southern Region 3489460 (46.77) 3715.92 (52.95)
Total 7461946 (100) 7016.30 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.
The above Table reveals the region-wise savings of SHGs with various
banks. The number of SHGs keeping savings with banks in northern, north-
eastern, eastern, central, western and southern regions constituted 4.99 per cent,
4.35 per cent, 20.47 per cent, 10.54 per cent, 12.88 per cent and 46.77 per cent
respectively. The savings with banks constituted 4.699 per cent, 1.87 per cent,
20.07 per cent, 8.60 per cent, 11.82 per cent and 52.95 per cent respectively in
northern, north-eastern, eastern, central, western and southern regions. The
southern region of the country dominate the other regions with 47 per cent of
the total SHGs and with ` 3715.92 crore of the total savings amount, followed
by the eastern region with 20 per cent in the number of SHGs and ` 1408.38
in the amount of savings with banks.
Theoretical Framework of the Study
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Table 2.4 Bank loan outstanding as on 31.03.2011 (Region-wise position)
Region Number of SHGs Loan amount outstanding (Crore)
Northern Region 149108 (3.11) 903.14 (2.90) North Eastern Region 150021 (3.13) 695.25 (2.23) Eastern Region 1105533 (23.10) 4202.55 (13.46) Central Region 358872 (7.5) 2365.40 (7.57) Western Region 316821 (6.62) 1246.23 (3.99) Southern Region 2706408 (56.54) 21808.59 (69.85)
Total 4786763 (100) 31221.16 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.
(Source: NABARD. Status of Micro finance in India 2012)
Figure 2.4 Region-wise Bank loan outstanding
The above Table and pie chart reveal the region-wise amount of bank
loan outstanding with various banks. The number of SHGs’ outstanding loan
with banks in northern, north-eastern, eastern, central, western and southern
regions constituted 3.11 per cent, 3.13 per cent, 23.10 per cent, 7.5 per cent,
6.62 per cent and 56.54 per cent respectively. The amount of loan outstanding
with banks constituted 2.90 per cent, 2.23 per cent, 13.46 per cent, 7.57 per cent,
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3.99 per cent and 69.85 per cent respectively in northern, north-eastern,
eastern, central, western and southern regions. The southern region of the
country dominated the other regions with 57 per cent of the total SHGs
outstanding and with ` 21808.59 crore of the total amount outstanding,
followed by the eastern region with 23.10 per cent in the number of SHGs
outstanding and ` 4202.55 in the amount of loan outstanding with banks.
Table 2.5 Total Savings of SHGs with banks- Agency-wise (31.03.2011)
Name of Agency Number of SHGs Total savings (Crore) Commercial Banks 4323473 4230.06 (60.28) Co-operative Banks 1155076 1350.84 (19.26) Regional Rural Banks 1983397 1435.40 (20.46)
Total 7461946 7016.30 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.
The above Table reveals the agency-wise position of total savings of
SHGs with the different types of banks. It is evident that the commercial banks
have the major share of savings of the SHGs with 60.28 per cent of the total
savings amount. Co-operative banks and Regional Rural banks hold 19.26 per
cent and 20.46 per cent of the total savings. It is evident that the performance
of commercial banks regarding the deposit holding is excellent.
Table 2.6 Bank loan outstanding against SHGs-Agency-wise (31.03.2011)
Name of Agency Number of SHGs Total Loan outstanding (Crore) Commercial Banks 3053472 21883.25 (70.09) Co-operative Banks 451798 1907.86 (6.11) Regional Rural Banks 1281493 7430.05 (23.80)
Total 4786763 31221.16 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.
Theoretical Framework of the Study
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The analysis of bank loan outstanding, agency-wise, reveals that out of the
total loan outstanding, 70.09 per cent was provided by Commercial banks. The
Co-operative banks provided 6.11 per cent and the Regional Rural banks provided
23.80 per cent of the total loans to the SHGs. It is clear that commercial banks are
playing an important role in the issuing of loans to the SHGs.
2.3 Income-generation activities of SHGs
Economic activity is not an end in itself but a means to an end. The
members of the Self-Help Groups that received assistance from the banks are
involved individually or collectively in income-generating activities. The
members are taking up economic activities in their own interest and they
prefer traditional activities in which they are well-versed than new activities.
The activities taken up by the Self-Help Groups in Kerala include Petty shop
management, Canteen, Food processing, Animal husbandry, Fisheries, Copra
processing, Agriculture nurseries, Diary development, Wooden products,
Tender coconut selling, Soap and detergent unit, Vegetable cultivation and
marketing, Umbrella making, Aquaculture, Hand-looming, Poultry, Coir
products making, Tailoring and Garment making, Communal farming, Banana
culture, Metal crushing and hollow bricks, Rice flour production and curry
powder, Handicraft making, Fish and meat stall, Beauty parlour management,
Female hygiene products, Paper products, Bed and pillow making, Ready
made garments, Leather product making, Bakery and sweet items, Mussel
culture, Printing press and Book binding, etc.
The guiding principles of Self-Help Groups - achieving rural development
through self-development of individual members, aim to increase productivity
of labour and other resources, popularizing ‘Thrift’ concept as a foundation for
socioeconomic development, and ‘Credit’ as a tool for development, to foster
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an entrepreneurial culture where each member realizes that they need the
support of the group to achieve their objectives. Self-Help Groups create and
include participatory and empowering culture. They also create benefit of
economies of scale by reducing cost in certain areas of production process,
which the members may decide to undertake as a common action. If the loan
taken from the SHG is invested in some productive activity, then surely it is
contributing towards alleviation of poverty. If the loan is spent on consumer
durables like homes, then also it is contributing towards alleviation of poverty.
But simply if the loan amount is simply spent on current consumption, then it
may deteriorate the economic condition of the clients.
Micro-finance programme is not fully devoid of defects. It has certain
problems and challenges in the course of its development. Often, the borrowers
face problems of identifying those economic activities that yield a rate of profit
necessary to cover the interest rate on loans. Even though the programme is
meant for the promotion of income-generating activities through the provision
of loans, members are finding it difficult to find economically remunerative
and productive activities. A risk-aversive character is quite observable among
the members, where they restrict themselves to non-farm activities, which are
traditional and less remunerative (Rajasekhar 2005). Moreover, there are
problems of getting loans on time, difficulty of getting raw materials, skilled
labour and marketing opportunities. Their problems continue even after
producing output, especially while finding a marketing outlet for their produce
(Madheswaran and Dharmadhikari 200I).
2.4 Swarnjayanti Gram Swarojgar Yojana
The Swarnjayanti Gram Swarojgar Yojana (SGSY) is a major government
programme for the self-employment of the rural poor. The programme was started
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61
on 01.04.1999 after restructuring and merging the erstwhile Integrated Rural
Development Programme (IRDP) and its allied programmes, such as Training of
Rural Youth for Self Employment (TRYSEM), Development of Women and
Children in Rural Areas (DWCRA), Supply of Toolkits in Rural Areas (SITRA)
and Ganga Kalyan Yojana (GKY), besides Million Wells Scheme (MWS). The
basic objective of the SGSY is to bring the assisted poor families (Swarojgaris)
above the Poverty Line by providing them income-generating assets through a
mix of bank credit and governmental subsidy. The programme aims at
establishing a large number of micro-enterprises in rural areas based on the ability
of the poor and the potential of each area.
Table 2.7 Performance of SHGs under SGSY
Sl.no. Items 2011-12 (Up to Dec.2011)
Since inception
(i) No. of SHGs formed 1.68 lakh 42.69 lakh
(ii) SHGs taking up economic activities 1.68 lakh 13.71 lakh
(iii) Women swarojgaries assisted 7.23 (69) 105.21 (60.6)
(iv) Subsidy disbursed 1089.55 crore 13860 crore
(v) Credit disbursed 2746.75 crore 30174 crore (Source: Annual report-2011-12, DRDA)
During 2010-11, out of the total 21.09 lakh Swarojgaris assisted, about
14.24 lakh were women Swarojgaris, which number constitutes around
67.49 per cent of the total Swarojgaris assisted. The SGSY is emerging as a
women-centric programme. The guidelines of the programme stipulate, inter
alia, that at least 40 per cent of the Swarojgaris will be women and 50 per cent
of all SHGs in a district will be women SHGs (DRDA 2011). With the present
experience under the SGSY, it has been noticed that the scheme has naturally
emerged as a women-led programme and, in the pockets where the programme
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has been successfully implemented, it has resulted in visible social and economic
empowerment of women.
Close coordination between different agencies responsible for the
implementation of SGSY is critical for the success of the programme. In order to
ensure coordination amongst rural development functionaries, Bankers and PRIs
etc. Various Committees are constituted under SGSY at the Central Level. The
Central Level Coordination Committee (CLCC) has been constituted to review
and ensure effective implementation of the programme. It consists of
representatives from State Governments and various Banks to discuss the
progress of the programme. Likewise, at the State Level, State Level Bankers’
Committee (SLBC) has been constituted, which is required to meet every quarter
to ensure proper follow up and effective implementation of the programme. At
the District level, there are District SGSY Committees under the Chairmanship
of the District Collector/Chief Executive Officer, which are required to meet
every month to review the progress of SGSY and suggest corrective action
wherever necessary. There are Block level SGSY Committees in each Block,
which are required to meet once in a month.
2.5 Marketing Initiatives under SGSY
Marketing of products made by Self-Help Groups of SGSY is also a
major area of concern under the Programme. To facilitate marketing of the
products produced by SGSY Swarojgaris, requisite provisions have been made
in the guidelines of the scheme. SGSY emphasizes backward and forward
linkages of the activities to be tied up appropriately so as to ensure that the
products manufactured by Swarojgaris are able to compete in the market and
they derive adequate income to cross the poverty line. Necessary support may
be taken from Government and private agencies in order to provide the
Theoretical Framework of the Study
63
backward and forward linkages to the groups / individual Swarojgaris of
SGSY.
2.6 Training under SGSY
SGSY is a process-oriented scheme which involves organization of the
rural poor into Self-Help Groups (SHGs), for their training and capacity
building to enable them to evolve into a self managed organization. Training
and capacity building of Swarojgaris is an important component of SGSY.
Under SGSY, 10 per cent of the financial allocation is earmarked for training
and skill development of Swarojgaris. Under SGSY, Basic Orientation is
provided to Swarojgaris for making them conversant with group dynamics in
an SHG, book-keeping, etc. In addition, Skill Development Training, in
identified activities is provided to Swarojgaris requiring additional skill
development / up-gradation of skills. The objective of this training is to ensure
that the Swarojgaris posseses the Minimum Skill Requirement (MSR). They
will be eligible for assistance only when they possess MSR, and loans will be
disbursed only when they have satisfactorily completed skill training. In
addition, it is important to provide suitable training to all stakeholders under
the programme, including facilitators/ Self-Help Promoting Institutions
(SHPIs), field level functionaries of banks and development functionaries of
the local government for ensuring successful implementation of the scheme. It
is beyond doubt that wherever these functionaries have been trained in the
concept of functioning of SHGs, group dynamics, guidelines of the scheme,
marketing and entrepreneurship development etc., the quality of groups as well
as the overall implementation of the programme has been qualitatively better.
A systematic review of SGSY has brought into focus certain shortcomings,
like vast regional variations in mobilization of rural poor; insufficient capacity
Chapter 2
64
building of beneficiaries; insufficient investments for building community
institutions; and weak linkages with banks, leading to low credit mobilization
and low repeat financing. Several states have not been able to fully utilize the
funds received under SGSY. Absence of aggregate institutions of the poor,
such as the SHG federations, precluded the poor from accessing higher-order
support services for productivity enhancement, marketing linkage, risk
management, etc. Several evaluation studies have shown that the SGSY
scheme has been relatively successful in alleviating rural poverty.
2.7 Support of NABARD
A Self-Help Group (SHG), as we know it today in India, is an outcome
of several experiments conducted at the Savings and Credit Management
Groups (SCMG), sponsored by Mysore Resettlement and Development
Agency (MYRADA). After experimentation with the cooperatives in some
projects, MYRADA felt that a shift top as an alternative credit system for the
poor was required along with the efforts to make the existing delivery system,
not only more appropriate and effective but also willing to accept and relate to
an alternative system with its own rules and management. It was in this
MYRADA project that National Bank for Agriculture and Rural Development
(NABARD) experimented the pilot project for the development of the SHG
system in India. In 1986-87, NABARD supported and funded an action-
research project on SCMG of MYRADA, for assessing its adequacy as an
instrument to help the target groups. The main objective of this pilot project
was to evolve supplementary credit strategies for meeting the credit needs
of the poor by combining flexibility, sensitivity, and responsiveness of
informal credit system with the financial resources of the formal credit
institutions.
Theoretical Framework of the Study
65
During 1991-92, NABARD launched 92 pilot projects on linking SHGs
with Banks, in various parts of the country. In July 1991, the RBI advised the
banks to participate in the pilot project and to extend finance to SHGs as per
the norms and guidelines of NABARD. In February 1992, detailed guidelines
were issued to the commercial banks, explaining the modalities of the pilot
project. Later, the scheme was made applicable to RRBs and Cooperative
Banks in May 1993. The NABARD guidelines to banks for implementation of
the pilot project allowed ample flexibility to the participating banks to provide
innovative responses and observed variations in the grassroots level situations.
It aimed at providing credit to the informal SHGs of the rural poor, through the
banking system, with minimal documentation and simplified procedures.
2.8 Models of bank linkage in India
For the SHG system developed and promoted by NABARD, they took
the initiatives for linkage between SHGs and NGOs on the one hand, and the
banks on the other. Several models of SHG-Bank linkage programme were
tried out. As a result of these experiments, three most commonly used Models
throughout the country came into existence.
Model I: The SHGs were organized and promoted directly by Banks. The
bank provided credit in bulk directly to the SHG, which might be
an informal or formal body. The SHG, in turn, would undertake
on-lending to its members, on terms and conditions agreed upon
mutually among them. NABARD provided refinance assistance to
the lending Bank. In this Model there was no involvement of NGOs
Model II: NGOs organized and promoted the SHGs, and then referred those
SHGs to the Bank for lending directly either to the SHGs or to
individual members of the SHGs. Here, the NGO stood only as a
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66
support to both the Bank and the SHGs, for monitoring and
evaluation of the projects, proper functioning of the SHGs,
repayment of the loans, and provided training to members of
SHGs, etc. NABARD provided refinance to the lending Bank.
Model III: The SHGs were organized and promoted by NGO and then
referred to the Bank for linkage, and the Bank provided finance
directly to the NGO for on-lending either to the SHGs or to
individual members of SHGs. The NGO was fully responsible for
making sure the timely repayment of the loan to the Bank, with
proper monitoring and evaluation of the projects, as well as of the
proper functioning of the SHG, and training of members of the
SHG.
NABARD provided refinance to the lending Bank. As per NABARD, in
Kerala, there are 5,629 SHGs under Model I, 13,403 under Model II and
14, 696 SHGs under Model III, linked to various financial institutions like
Commercial Banks, Regional Rural Banks and Cooperative Banks (NABARD,
2003-2004)
2.9 Role of NGOs
As per the NABARD guidelines, the NGOs have been playing an active
role in fostering the growth of SHGs for furtherance of their basic objectives. It
has been observed that NGOs, as a fundamental principle of their developmental
role, always aim to make the rural poor economically self-sufficient through
development of individuals with group support of their fellow villagers. This
traditional concept took an interesting turn with the introduction of linkage of
the SHGs with the formal banking system, started by NABARD in India
through Pilot Project from the year 1991-92. Consequently, the role of NGOs
Theoretical Framework of the Study
67
also assumed an additional dimension to economic uplift of the poor. In the
backdrop of these developments and the traditional promotional activities,
undertaken by the NGOs for the SHGs, the NGOs are expected to support the
SHGs in the following areas:
To motivate the rural people to organize themselves and to form
into self-help groups;
To form groups at the village level;
To educate and train the group members in managing the group
activities like maintenance of books of accounts, conducting
meetings, management of funds, etc.
To inculcate and promote thrift and savings habit among the group
members and to help in institution building along with the
development of the individual;
To help the SHG in identifying raw materials and local resources;
To help the group members to upgrade their skills and technology
to make the best use of resources;
To make available credit facilities and to act as a link between the
rural poor and the bank;
To educate and train the group members to utilize credit properly
and to improve their economic conditions;
To help the group members in exploring markets for their
products;
To work as facilitator in the meetings of the SHGs and
To act as friend, philosopher and guide to the SHGs.
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2.10 Self-Help Groups in Kerala
In India, SHGs are more prominent among the South Indian States like
Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Each of these states has
its own government programme for the promotion of micro-finance and it is
called by different names, even though the internal operations of these
groups are the same. Some of these SHGs coming under each of the state
programmes have linked themselves to the banks under NABARD and it is
this programme which gave wide popularity to micro-finance in the country.
Kerala occupies a unique place among the States of India, as it achieved
success in poverty reduction over the past thirty years. This State has
attracted the attention of various scholars for its remarkable achievements in
social development indicators, in the absence of economic growth. As a state
in a third-world country like India, the attainments are comparable to those
of the developed countries of the world. Kerala's accomplishments reveal
that the well-being of the people can be improved and social, political and
cultural conditions can be transformed even at low levels of income, when
there is appropriate public action (Kannan 2000; Parayil 2000). This
reduction in poverty can be attributed to various factors, centred on public
action, state intervention, and an educated population. Poverty, however,
remains in Kerala.
The SHGs formed by NGOs, banks and government are playing an
important role in the development of the State. The SHG movement was
initiated in the State of Kerala on the basis of the success of SEWA of
Ahmadabad, MYRADA of Mysore, and several other experiences in the
country. The programme taken up and implemented in the right sense would
be very effective in eradicating poverty and enhancing women empowerment.
The SHGs in Kerala have made significant remarks in this area. Historically,
Theoretical Framework of the Study
69
many church-based development institutions in Kerala have been promoting
credit unions, which organize the poor into large groups of 150 to 200 members
and pool their major savings for their common benefits. These credit unions
lacked the participatory decision-making found in SHGs. During the late
1980s, this drawback was realized and, under the guidance of NBARD, many
voluntary agencies recognized their credit unions as smaller and more
effective SHGs. During the late nineties, the Government of Kerala had
accepted the NHG model for eradication of poverty from the State by forming
Kudumbashree Mission under the Department of Local Self-Government. The
Kudumbashree Mission launched by the State Government, with the active
support of the Government of India and NABARD, had adopted a group
approach for wiping out absolute poverty through community-based
organisations. It had a three-tier structure with NHGs at the grassroots level, Area
Development Society (ADS) at the ward level, and Community Development
Society (CDS) at the Panchayath level.
Even though NHGs are engaged in issues of social significance through
the participation of women in grama sabhas, they give equal importance to the
promotion of thrift and credit, to facilitate the poor to save, and to provide
them cost-effective and easy credit. Thus, the thrift and credit enabled the
poorest without collateral security to acquire loans from small savings
contributed by them, who had been considered for a long time as unbanked.
The loans obtained from these groups provide an opportunity for them to
initiate small income-generating activities and thereby improve their income
and living standards. The NHGs are similar to SHGs in terms of their day-to-
day operations. Now, many agencies are coming forward to form SHGs for the
uplift of the weaker sections.
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Table 2.8 Growth of CDS and NHGs in Rural and Urban areas
Rural NHGs Urban NHGs
Year No of CDS No of NHGs No of CDS No of NHGs
2000 262 22308 58 7538
2001 880 101622 58 7848
2002 986 107745 58 7863
2003 990 122704 58 7947
2004 991 143983 58 8518
2005 991 153117 58 10687
2006 999 163426 59 11862
2007 999 168157 59 13279
2008 999 176200 59 13626
2009 999 180039 62 13982
2010 999 186792 62 14478
2011 999 195352 69 26348 (Source: Economic review-Planning commission, Kerala, various years)
From the above Table, it is observed that the Kudumbashree system is
more active in the rural areas. At the grass roots level, there is a substantial
increase in the growth of the NHGs. During the period from 2000 to 2011, the
number of NHGs in the rural areas rose from 22308 to 195352 groups and in
the urban areas it increased from 7538 to 26348 groups.
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(Source: Economic review-Planning Commission, Kerala, various years)
Figure 2.5 Growth of NHGs in Rural areas
The growth of NHGs in rural areas during the twelve years from 2000 to
2011 shows an increasing trend. The rate of growth can be well established
with a linear trend with b=12330 and a=63309, with a significant R2 value,
0.829. It implies that the NHGs in rural area are expected to grow at a linear
rate of 12330 over the period from 2000 to 2011.
Figure 2.6 Growth of NHGs in Urban areas
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The number of Urban NHGs in Kerala increased from 7538 to 26348
over a period of twelve years from 2000 to 2011. The data over this period
seem to show an exponential growth in the number of NHGs in the urban areas
of Kerala. Using the function, y= aebx, the equation estimated using regression
tool, results in b=0.095, a=5997 which is valid with a significant R2 value,
0.865.
Table 2.9 Thrift and loans distributed through the rural NHGs
Year Families covered
Thrift collected ( ` )
Loan distributed ( ` )
2001 548349 84875980 21745532
2002 Na 1103142997 972370589
2003 2068227 1635202807 1981590544
2004 2462322 2879949978 5117085458
2005 2837977 4413895241 9686426420
2006 3020500 5949299905 14214712935
2007 3183529 7192300797 18250090968
2008 3243395 8480312526 21861166334
2009 3210392 9400550386 25039394539
2010 3311113 11930735665 32822548945
2011 3344102 1358640123 39731632226
(Source: Economic review-Planning commission, Kerala, various years)
The above Table shows the gross of the cumulative thrift collected and
the internal loans distributed among the members by the rural NHGs in Kerala.
The total amounts of thrift mobilized and loan distributed during 2001 were
only ` 8.48 crore and ` 2.17 crore respectively. There is a significant increase
in the thrift and loan amounts of the NHGs within a period of ten years and the
cumulative thrift mobilized by the rural NHGs.
Theoretical Framework of the Study
73
(Source: Economic review-Planning commission, Kerala, various years)
Figure 2.7 Loan distributed through the Rural NHGs
The bank loan distributed through the rural NHGs during the twelve
years from 2000 to 2011 shows an increasing trend. The rate of growth can be
well established with a linear trend with b=39743 and a=84188 with a
significant R2 value, 0.963. It implies that the bank loan given per NHG is
expected to grow at a linear rate of 39743 over the period from 2000 to 2011.
Table 2.10 Thrift and loans distributed through the urban NHGs
Year Thrift ( ` ) Loan ( ` ) 2001 156781399 161160160 2002 199098559 209587470 2003 227470878 232401712 2004 285383444 312837707 2005 367870097 408962225 2006 435721041 485901880 2007 523209219 613059389 2008 670358501 726540490 2009 706754783 857690457 2010 819738567 1018421845 2011 1304634126 1875628490
(Source: Economic review- various years)
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The above Table shows the cumulative growth of thrift mobilization and
internal loan distributed by the urban NHGs from 2001 to 2011. Within a
period of ten years the cumulative thrift increased to ` 130.46 crore and the
loan has enlarged to ` 187.56 crore.
(Source: Economic review- various years)
Figure 2.8 Loans distributed through the urban NHGs
The loan distributed through the urban NHGs in Kerala increased from
` 16.116 crores to ` 187.56 crores over a period of eleven years from 2001 to
2011. The data over this period seem to show an exponential growth in the
amount of loan of urban NHGs in Kerala. Using the function, y= aebx, the
equation estimated using regression tool, results in b=0.223, a=1269 which is
valid with a significant R2 value, 0.982. To further add an explanation, the
initial amount of loan is expected to be at the rate of ‘b’.
2.11 The Kudumbashree Programme in Kerala
Kudumbasree is a Programme under the Poverty Eradication Mission
(PEM)-a Government Organised Non- Governmental Organization (GONGO)-,
Theoretical Framework of the Study
75
directly supervised by the Local Administration Department of the
Government of Kerala. The word Kudumbasree means prosperity of the
family. It indicates the approach of the State Poverty Eradication Mission,
which was launched on 1st April 1999 as a partnership of the State
Government, Central Government, Local Government and the National Bank
for Agriculture and Rural Development (NABARD) for eradicating poverty.
Anti-poverty initiatives by the State Government with assistance from the
Central Government, like the Development of Women and Children in Rural
Areas (DWCRA); the Urban Basic Services (UBS); the Urban Basic Services
for the Poor (UBSP); Community-Based Nutrition Programme and Poverty
Alleviation Project (CBNP & PAP); the Prime Minister's Integrated Urban
Poverty Eradication Programme (PMIUPEP), etc., were implemented through
Self-Help Groups of women.
In Kerala, the Swarnajayanti Shahari Rozgar Yojana (SJSRY);
Development of Women and Children in Urban Areas (DWCUA); the
Swarnajayanti Gram Swarozgar Yojana (SGSY) in rural areas, and various
other development programmes of the Government are being implemented
under Kudumbasree, the community-based organizational structure created,
known as Community Development Society (CDS). In order to implement
the above-mentioned programmes and schemes, the CDS has a three-tier
organizational structure. At the grass-roots level, every poor family in a
neighborhood, each represented by a woman, is organized into a Neighborhood
Group (NHG), covering about 20 to 40 households. A team of five barefoot
organizers, consisting of Community Health Volunteer, Community
Infrastructure Volunteer, Community Income Generation Volunteer, Secretary
and President, is at the helm of every NHG. The NHGs are federated, at the
ward level, into Area Development Societies (ADSs) and then further
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networked into Community Development Societies (CDSs) at the Panchayat,
Municipality or Corporation level. The NHG/ADS/CDS system was initiated
in Alappuzha Municipality while implementing UBS and UBSP Programmes,
during the eighth Five Year Plan, and then extended to all the Corporations,
Municipalities and Gram Panchayats throughout Kerala.
The strategy slogan of the Kudumbashree Mission is "reaching families
through women and reaching the community through families". Women
empowerment initiatives, micro-finance operations, micro-enterprise and
convergent action constitute the core activities of Kudumbasree, carried out
through organizations of women below the poverty line. Kudumbasree works
through a community-based organization of the poor, called Community
Development Society (CDS), under the local government laws. The CDS is
empowered to identify the beneficiaries of anti-poverty programmes and take
up community contracting of local development works. Thus, the CDS system
has the right of voice, the power of choice and the entitlement of action - that
is, real empowerment. A significant achievement has been the setting up of a
process of genuine empowerment of women - avoiding patronage in
identification of the poor, improving knowledge about benefits and services,
enhancing capacity to access guaranteed entitlements, social and economic
security through self-help, expanding control over resources meant for the
poor, strengthening demand for improvement in services, and gradually
moving on to public action. At present, there are 45,405 SHGs under
Kudumbasree, catering to the needs of about 10 lakh poor families. The total thrift
collection is ` 38.7 crore and thrift loan given through these SHGs amounts to
30.08 crore. Kudumbasree gives great importance to micro-enterprises, both
individual and collective. There are about 11,042 individual micro-enterprises and
711 group micro-enterprises functioning under Kudumbasree. Bank loan utilized
Theoretical Framework of the Study
77
for these enterprises is ` 6.06 crore and the subsidy amount is ` 5.71 crore.
The role played by Kudumbasree in poverty eradication in Kerala has been
recognized by various international agencies.
2.12 Economic Development Programmmes of Kudumbashree
The Local Economic Development Programme of Kudumbashree
involve community participation through the women's network in micro-level
planning and development. It also involves convergence of resources and
programmes at the level of local government. The Schemes of Micro-enterprises
development, Collective farming, Responsible Tourism programmes, Special
Urban Livelihood Projects, Marketing intervention Programmes and Samagra are
some of the evolving models of local economic development programmes of
Kudumbashree.
(I) Collective Farming
It is an initiative introduced to encourage cultivation by neighbourhood
groups. It brings in significant changes in the lives of the poor and helps
to increase agricultural production by bringing fallow and cultivable
wasteland into agricultural use, and has significance as a food security
measure. Women enter the programme as cultivators, as opposed to
agricultural labour and control over the means of production and access
to formal credit help in increasing the returns from farming. The
programme is being implemented in all districts with the support of
Local Self Governments.
(II) Micro Enterprises
Supporting and sustaining micro-enterprises has always been a challenge
for development administration. Problems of scale, capability, market
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and vulnerability do not offer easy solutions. In the recent past,
Kudumbashree has been attempting to analyze and resolve these
problems specifically and jointly, both by increasing the interface with
the LSG and the entrepreneur, regarding existing programmes, and by
bringing new strategies and new programmes that help converge
resources and address arising issues proactively and creatively.
ll (a) Rural Micro Enterprises Scheme (RME)
The Rural Micro-Enterprises (RME) Programme was initiated to help
women to setup Individual and Group enterprises, the minimum number
of people required for a group enterprise being ten. Various activities
like catering groups, traditional delicacies, paper products, super
markets, direct marketing, various food products, goat rearing, dairy
units, rabbit rearing, etc have been formed under the programme.
ll (b) Yuvashree
The Yuvashree or 50K programme provides employment to educated
youth in the State through micro-enterprises. The Objectives of the
programme involve facilitating youth to secure sustainable employment
opportunities, to foster economic development by creating jobs for the
poor, to identify innovative areas to set up micro enterprises for the
youths from BPL families and to provide hand holding and escort
services to the new generation entrepreneurs. This programme also gave
a chance to men from the Kudumbashree families to setup their
enterprises. Emphasis is given in setting up innovative enterprises.
ll (c) Innovation fund/Technology fund
Innovation fund was initiated for supporting innovative micro-enterprise.
The main objective is to cover initial risk. Suitable innovative micro-
Theoretical Framework of the Study
79
enterprise projects will be identified by Micro enterprise and Samagra
teams in Districts which will then submit proposals to the Head Office.
Technology fund is planned to procure advanced and innovative
technologies for setting up micro-enterprises under Kudumbashree. The
cost of technology includes the cost to develop a new technology,
purchase of a technology from research organization, laboratories,
individuals, NGOs, etc.
ll (d) Revolving fund
One of the major issues faced by Micro Enterprise is the shortage of
working capital due to delay in payments by wholesalers and
Government Departments. Revolving fund is meant for meeting this
urgent requirement of working capital. Kudumbashree succeeded in
providing Revolving fund to units, which helped them in harnessing
working capital for continuous production-supply.
ll (e) Crisis management fund
Crisis management fund is meant for responding to an unpredictable
negative event to prevent it from escalating into an even bigger problem
related to Micro enterprise activities of Kudumbashree. The scheme has
only recently become operational. Kudumbashree adopts a four-pronged
approach towards crisis management:
1) Anticipate potential crisis situations and prepare for them,
2) Provide accurate information during a crisis
3) React as quickly as possible to the situation
4) Evolve long-term solutions.
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ll (f) Second Dose Assistance to Microenterprises
This is a special assistance programme to help units which have fallen
on hard times to revive and develop strategies to become viable again.
lll. Interventions under micro enterprises
1. ME Meets
ME meets are conducted at the Block level to identify enterprises
needing Kudumbashree support and market facilitation. These meets
help in networking those enterprises that have not availed themselves of
subsidy support from Kudumbashree. Kudumbashree succeeded in
conducting 87 ME meets and support 5399 enterprises in the last fiscal
year.
Kudumbashree provided support in the following areas:
1) Skill trainings
2) Accounting support through KAASS
3) Release of revolving fund / subsidy
4) Productivity improvement programmes
5) Marketing support
6) Inter-district product transfer.
IV Kudumbashree Consortiums
1. Kudumbashree I.T Consortium-Unnathi
The Unnathi I.T is a Consortium functioning as an agency that possesses
the capability to execute big data entry (and similar) assignments that
require pan-Kerala presence, for potential clients including government
departments, private and public sector banks, IT companies, etc., and
canvass orders from them. The Consortium will divide and assign the
work between the participating units, monitor the quality and timeliness
Theoretical Framework of the Study
81
of execution, take corrective measures as and when required, deliver the
output to the clients and ensure collection and disbursement of money.
2. Kudumbashree Nutrimix Consortium-Amrutham
The Amrutham Nutrimix supplement produced by the units has been
distributed to the children through Anganawadis of the State. The
Nutrimix Consortium was an important step to increase the productivity of
units, to generate more income, and to address the common issues and
challenges faced by the units. The main aims of the Nutrimix Consortium
are common raw material procurement, developing a centralized
distribution channel, developing value-added products and diversifying
products, preparing the units to face competition from the market by
using the existing infrastructure and human resources.
3. Kudumbashree Garments Consortium-Kadambari
Kudumbashree Mission has established KADAMBARI, a consortium of
Kudumbashree Apparel units and Common Facility Centres (CFCs).
The Consortium has been established to deliver a host of services to
Kudumbashree Apparel units, through establishing backward and
forward linkages and instituting a professional management structure.
The Consortium is owned by Kudumbashree women entrepreneurs, and
run with professional support.
V Special Enterprises
The special enterprises that have been specifically sponsored and
developed by the Kudumbashree Mission are.
1) Santhwanam: An Enterprise to provide medical test facilities at
one's doorstep. The Santhwanam enterprise is the collaborative
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effort of Kudumbashree, HAP (Health Action by People) and SBI
(State Bank of India). This seeks to facilitate identification and
monitoring of life style diseases in the community.
2) Thelima-Solid Waste Management: Under this enterprise,
women from the poor families who are the members of the
Community-Based Organisations (CBOs) of Kudumbashree are
engaged in door-to-door household waste collection and transport
to the transit points fixed by the Urban Local Bodies.
3) IT & ITES: Kudumbashree enterprises in the highly competitive
world of information technology. Much of the data entry work
taken up by Government departments is being outsourced to these
units which give employment to over 2500 poor women. Digitizing
the BPL data and ration cards for the State Govt. Hospital kiosks for
birth registration was taken up by various IT units.
4) EKSAT : EKSAT is a group of young training professionals who
have the double advantage of knowing the community network
inside out as well as being capacitated by unique participatory
training methodologies. There are 3 EKSAT teams - based in
Alappuzha, Ernakulam and Kozhikode respectively. They have
been providing organizational capacity building to the network, as
well as orientation programmes on enterprise and livelihood
development.
5) KAASS : Kudumbashree Accounts & Audit Service Society; a
home-grown enterprise to ensure proper account keeping in the
community network. This team was formed with the aim of
auditing CDS
Theoretical Framework of the Study
83
6) TRISAT : Started with the aim of exclusive development of tribal
community by providing trainings, by conducting workshops and
through other means. Talented Tribal promoters working with the
tribal department were selected as resource persons. Tribal
volunteers from the community are in turn trained by the RPs
about the schemes which can be availed for the benefit of the
community.
7) Cafe Kudumbashree: This is a team of hotel management
professionals who provide both technical and marketing support to
create Kudumbashree canteens and restaurants. The restaurants are
branded under a common brand called ‘Cafe Kudumbashree’ and
standardized foods and services are provided. Handholding support
to units is given for quality, management diversification of
products, new recipes, best practices in the industry, and better
resource utilization, catering to customer needs.
8) Nature Fresh: The idea of the project is to cut down the time
between production of milk and its consumption, through a
combination of hygienic management and innovative supply
strategies, enabling to fix a premium on fresh quality milk. The
milk produced is delivered to houses within a short span of time.
Traceability is ensured by numbering the cows and affixing the
numbers to the bottles seals. Cost-effective cattle sheds, designed
by experts in order to ensure maximum hygiene, have been
constructed in all the homesteads.
9) SME: Sales and Marketing enterprises (SMEs) are micro enterprises
that function with the specific purpose of marketing products of
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Kudumbashree entrepreneurs. Sales and Marketing enterprises
(SMEs) are micro enterprises that function with the specific purpose
of marketing products of Kudumbashree entrepreneurs.
10) Event Management Groups (EMGs): EMGs were formed with
the objective of managing Kudumbashree monthly fairs. The
responsibility of organizing monthly fairs was vested with the
district missions, but, when women entrepreneurs found it difficult
to stay late in the evenings to sell their products, EMGs were set
up as an alternative management mechanism.
Vl Machine Directory
Machinery directories include the details of machines and specifications in
some common enterprises that have substantial technology requirements.
The compilation will help entrepreneur take informed decisions regarding
the machinery.
VIl Micro enterprises Consultants System
Kudumbashree Micro Enterprises Consultants provide the handholding
support necessary in project preparation and liasoning with banks.
Capacity building was needed for the MECs, as not all of them were
well-versed with entrepreneurship, changing trends, the preferences of
customers, or environmental and other constraints that affect
businesses. The area of consultants includes Overview of business,
Financial management, Sales and marketing, Costing and pricing.
Along with the consultancy services, they also provide necessary
suggestions and arrangements to improve the performances of the
groups.
Theoretical Framework of the Study
85
2.13 Marketing Initiatives of Kudumbashree
The marketing interventions of Kudumbashree include the Community
Marketing Network, Retail Shop, Sales and Marketing Enterprises and the
Home shops. Direct marketing, group’s participation in national and
international trade fairs, commercial tie-ups for marketing, and developing
retail outlets are some of the other marketing interventions of the Mission.
1. Monthly Market
The study conducted by Local Self-Governments and various
Government Departments during 2006 gave new insights to marketing of
the products of Kudumbashree. An immediate intervention in the area of
marketing, quality improvement, production capacity enhancement, product
consistency branding, packing, etc., became imperative for the success of
enterprises. The first intervention taken by the Mission was to organize
monthly markets across districts so that the issue of marketing could be
solved. The logic behind it was that unless the enterprises had marketing
opportunities their income and production would stay sub-optimal.
A permanent market opportunity and good income would help the
entrepreneurs to produce more. The quality improvement, concept of
branding and price standardization could be brought in. Bulk production
would help them to reduce the price. In addition to all these, the attitude
of the entrepreneurs would change and they would learn how to be more
competitive in the open market. Monthly markets became operational
with the active support of the CDS’s and entrepreneurs. The format of
monthly markets was that the markets should be organized in all districts
in the first week of every month on the same date and at the same venue,
preferably a central location.
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2. Community Marketing Network
The monthly markets threw up the challenges of procurement and venue
management. In the absence of dedicated personnel, districts
experimented with management options roping in the CDS, Micro-
Enterprise Consultants, (MECs) from the community, or forming event
management groups- a marketing enterprise that would help the small
time, distant producer in bringing their products to the market and
selling the products at a fair price.
3. Retail shop
The first Kudumbashree state level outlet, ‘THANIMA’, started functioning
in Trivandrum Museum Compound. Around 100 products produced by
Kudumbashree entrepreneurs from all over Kerala are available at
‘THANIMA’ outlet.
4. Sales and Marketing Enterprises
There has been a felt need for setting up enterprises whose function is to
exclusively market products of Kudumbashree enterprises. Current
Micro-enterprises programmes, viz., RME, Yuvashree and SJSRY were
designed largely with production Micro-enterprises in mind, and hence
held limitations for setting up enterprises that solely focused on marketing
of Kudumbashree products or creating management structures. To address
this gap, a new programme called Sales and Marketing Enterprises
(SME) was designed. Under this programme, two types of marketing
enterprises for Kudumbashree products (Local Sales and Marketing
Enterprises and Mission-Initiated Sales and Marketing Enterprises)
were initiated.
Theoretical Framework of the Study
87
5. Branding
Branding of Kudumbashree products provided better protection for
Kudumbashree products, Tax exemptions, and Enhancing marketing
avenues. Presently, registration of various brands in different classes is
under way.
6. Home Shops
Early experiments of having a young group of market agents who would
procure and sell exclusively within the Kudumbashree network, through
the CDS, changed gear and started dealing with local producers
facilitated by the marketing group to come out with household articles
like soap powder, detergents etc., which were given a local brand name
and distributed through a ‘home shop’ network of part-time distributors.
The managers of the home shop are women of the network who spare a
couple of shelves in their homes to stock these local products, and spend
a couple of hours a day meeting NHG members and individuals to sell
their products. It is a part-time, stress-free, supplementary income
providing job for the home shop distributors.
7. National and International Trade Fairs
Kudumbashree stall bagged the centre of attraction in recent National
and International Trade fairs in India. Food Products, Herbal Products,
Handicrafts, etc were exhibited by Kudumbashree and they achieved a
strong sale turnover in those fairs.
8. Samagra
Samagra is an initiative independently developed by Kudumbashree,
being implemented in the State in collaboration with the three-tier local
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self-governments and other agencies. It is an attempt to address the
entire production – supply value chain holistically, by scaling up
productive activity both qualitatively and quantitatively, and seeking
viable supply opportunities.
2.14 The Concept of Women's Empowerment
Empowerment is a multi-fold concept that includes economic, social and
political empowerment. The individual or a group gains power and ability to
take control over lives. It includes access to resources, thereby, to opportunity
to participate in decision making, increased bargaining power, self-confidence,
self-esteem and self-respect. The concept of empowerment of poor women is
relatively new, especially in the realm of development. It is a process of
changing the existing power relations in favour of the poor and marginalized
women. It is a long-term process that requires changes in knowledge, attitude
and behaviour not only of women, but also of men and the society at large.
Empowerment of women in general and poor women in particular, is the thrust
area of development initiatives in India today. Empowerment is a process of
awareness and capacity building leading to greater participation to greater
decision-making power and control, and to transformative action. The concept
of women's empowerment has become the catchword today.
Here, the reason for targeting women pertains to high repayment rates. It
is assumed that increasing women’s access to micro-finance service will in
itself lead to individual economic empowerment through enabling women’s
decisions about saving and credit use, enabling women to set up micro-
enterprises, increasing income under their control. This increased economic
empowerment will lead to increased wellbeing of women and also to social
and political empowerment.
Theoretical Framework of the Study
89
The concept of women's empowerment appears to be the outcome of
several important critiques and debates generated by the women's movement
throughout the world, and particularly by Third World feminists. Its source
can be traced to the interaction between feminism and the concept of "popular
education" developed in Latin America in the 1970s. The concept of the
empowerment of women as a goal of development projects and programmes had
been gaining wider acceptance in the 1990s. Women's participation in grassroots
organizations is increasingly recognized as crucial to their empowerment and as a
way for them to help shape development policies. According to Khan (2001)
and Sinha (2002), the Eighth Five Year Plan (1992-97) makes a shift from
'development' to 'empowerment' of women. Policies, programmes and projects
designed to assist and uplift the low-income women have shifted from the
"welfare approach" to an "empowerment approach". Hence, a number of
measures have been taken by the Government in this direction for social and
economic emancipation of women. According to Sahay, empowerment occurs
both at individual and at collective levels. At the individual level, a new
confidence and sense of self-efficacy emerges as the person redefines him or
herself as a more capable and worthy individual. Closely connected to the
psychological redefinition of ‘self’ is the actual increase of individual knowledge,
competency, skills, resources, and opportunities, which enable more effective
action and interpersonal relations. There is a positive interactive effect
between the development of self-confidence and the strengthening of personal
ability. As per NABARD's estimate, there are going to be several thousands of
SHGs being linked with different banks for their financing and several
hundreds are watching this development with great interest and enthusiasm.
Micro-finance is now accepted the world over as an effective tool for socio-
economic empowerment of the poor. The micro-finance movement in Kerala
is getting entrenched well with the initiatives taken by the National Bank,
Chapter 2
90
Government of Kerala (through Kudumbasree Programme) and with the
participation of NGOs, bankers and development agencies. Thus, it is found
that the SHG system is going to become a movement in Kerala. Taking this
into consideration, the present study would be of great importance to both
government and Kudumbasree, to evaluate the performance of the SHGs
registered under local self government of Kerala. Even though the SHGs have
emerged as an alternative developmental strategy to promote common interests
of the weaker and vulnerable section of the society and have contributed to the
empowerment of the poor women, an array of problems confront the SHGs,
including improper selection of group activities, lack of cooperation and zeal
among the members of the group, non-availability of adequate amount of raw
materials, lack of demand for the products, lack of marketing facilities, etc.
Against this background, the present study was undertaken to identify
the production and marketing performance of SHGs and their influence on the
success and stability among SHGs in Kerala. The specific objectives of the
study were: (1) to identify the various financial and non-financial difficulties
faced by the Self-Help Groups to produce their products. (2) To analyse the
various problems faced by the SHGs to market their products among the
public. (3) To evaluate the service provided by the government and non-
government agencies to the SHGs.
Theoretical Framework of the Study
91
References
[1]. A.V.V.S Subbalakshmi, “Micro finance: A study of sample blocks of Kancheepuram” Southern Economist, june 15, 2009 pp-13-14.
[2]. Anil Kumar (2004), Marketing practices and women entrepreneurs and: an empirical study, empowering rural India, pp 287-293
[3]. Kindo, Sushma, Micro credit and women empowerment, A study in a tribal district of Odisha, Centre for Development Studies, Thiruvananthapuram-2009-2011
[4]. Lina Joy, A. Prema and S. Krishnan (2008), “Determinants of Group Performance of Women-led Agro-processing Self-help Groups in Kerala”, Agricultural Economics Research Review, Vol. 21 (Conference Number) pp 355-362
[5]. NABARD. Status of Micro finance in India 2012
[6]. S.M Feroze and A.K Chouhan, Micro finance in India, A performance evaluation, New century publications, New delhi- India.
[7]. S.Venkateshmurthy & G.M. Dinesh, women empowerment through SHG-an analysis’
[8]. www.kugumbashree.org.
[9]. Zubair Meenai, (2010), Women’s empowerment and micro credit – emerging space for social work practice, The Indian Journal of Social Work, volume 71, issue 1, pp 27-49.
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